US markets posted weekly losses at the close of trading on Friday as investors came to terms with comments from the Fed that indicate the central bank will battle hard against inflation. Against this backdrop, this week will see a raft of major earnings releases as updates from the big banks signal the return of earnings season.
Here are the earnings we have picked out for a closer look across the week ahead:
Delta Air Lines (NYSE: DAL)
This major US airline has seen its share price tank and then recover some ground across the year to date. The stock has faced pressure from rising jet fuel prices, which have climbed on the back of Russia’s invasion of Ukraine.
In its most recent earnings release, the company’s CEO Ed Bastian said he expected to see a “strong spring and summer travel season with significant pent-up demand for consumer and business travel”.
The release this week could offer insight into these seasons, giving us an early look at the road ahead for Delta and other major US carriers.
With interest rates on the rise, investors might also want to keep an eye on the company’s level of debt, which have historically been higher than some of its competitors. We’ll find out more when Delta releases its full earnings report on Wednesday morning.
JPMorgan Chase (NYSE: JPM)
This week is a big week for bank stocks, with a slew of their quarterly updates heralding the return of earnings season. JPMorgan is prominent among these major banking stocks, but the picture might not be rosy for the company.
For one thing, analysts from Refinitiv have warned that the six biggest US banks are set to see their first quarter net income come in about 35% lower than 12 months ago, with investment banking and trading revenues set to have declined during the period.
JPMorgan, along with other major US banks, has its fortunes closely tied to the US economy, so investors will be looking out for major changes in the conflict in Ukraine and America’s role in it.
The stock is down by just over 17% across the year to date and down by nearly 15% across the last 12 months. JPMorgan’s earnings release is scheduled for Wednesday morning.
Wells Fargo & Co (NYSE: WFC)
Like JPMorgan, Wells Fargo is closely tied to the US economy and so investors will be keenly looking for any hint of change in the Russia and Ukraine conflict. However, the bank showed that it has been performing well in its most recent earnings update and it has been buying back its own shares.
This goes quite some way to explaining why Wells Fargo’s share price has performed so much better than other big US banks across the year to date, with the price having declined by just under 4% compared to the almost 20% declines seen in the stock price of most of the other major players.
However, Wells Fargo will have to put in another strong performance to keep things rosy with investors. At the moment, consensus analyst estimates have the company reporting earnings of $0.80 per share on revenues of $17.79bn later this week.
Expect WFC earnings to be released before the market opens on Thursday.
Taiwan Semiconductor Manufacturing Company Ltd (NYSE: TSM)
This company has already reported that its revenue for January through March 2022 totalled $16.9bn, an increase of 35.5 percent compared to the same period in 2021. This record revenue for the period indicates a strong recovery from the COVID-related issues that have hampered the business over the last couple of years.
However, the company’s chairman, Mark Liu, warned at the end of March that demand for electronics such as smartphones and tablets is in decline, singling out China as an area of particular concern. Even so, overall semiconductor demand remains strong.
Liu explained:
“We still see robust demand in automotive applications and high-performance computing as well as internet of things-related devices. We still cannot meet our customers' demand with our current capacity. We will reorganize and prioritize orders for those areas that still see healthy demand.”
Investors will be looking for more general commentary on the semiconductor industry, as well as information about disruption and rising costs in Taiwan Semiconductor’s operations. Look out for TSM’s earnings release on Thursday morning.
UnitedHealth Group (NYSE: UNH)
This healthcare and insurance giant is one of the few stocks in the green across the year to date, with its share price having climbed by around 8% since the start of 2022. This is no surprise when you look at the positivity surround the company.
Analysts from Truist Securities have said investors can expect that the Minnesota-based business will deliver another quarter of robust revenue and customer growth, with this being powered by UnitedHealth’s move to a value-based offering.
Both its United Healthcare and Optum operating segments achieved strong revenue and earnings growth in the previous quarter and investors will be looking for signs that the business’ continued expansion is fuelling continued growth.
For 2022, the company has projected revenues of between $317bn and $320bn, as well as net earnings of $20.20 to $20.70 per share. UNH’s first quarter earnings release will be available from Thursday morning.
